India Inc hails relaxation in multi-brand retail norms

NEW DELHI: Hailing government's announcement to relax investment norms in multi-brand retail and raising FDI caps in several sectors, India Inc today said reforms were "much-needed" and will boost the confidence of foreign investors which will help in reviving the economy.

"These reforms were much-needed," industry chamber CII said.

Also, this is a commentary on the commitment of the government to take reforms forward at a time when the economy is in need of many such measures, CII said.

"The present situation on the Current Account Deficit front necessitates greater foreign funds flow. Therefore, we hope that we shall see FDI interests in these sectors soon, in keeping with the medium-term promise that India presents," it said.

The government today relaxed investment norms in multi-brand retail and raised FDI caps in several sectors while making it 100 per cent in telecom.

In multi-brand retail, the government diluted the mandatory 30 per cent local sourcing norms and permitted states to include cities with population less than 1 million for allowing multi-brand retailing.

On increasing FDI limit in telecom to 100 per cent from 74 per cent earlier, Global Consultancy Giant PwC said 100 per cent FDI will finally allow foreign telecom players to own and fund the Indian telecom companies without having to be restricted by the Indian partners funding capacity.

"This will allow several Indian telecom companies to get the much-needed funds from overseas without having to manage their operations by surviving on expensive local debt. The telecom sector as a whole will benefit from this move," PwC Executive Director (Tax and Regulatory Services) Goldie Dhama said.